Diesels may return to Japan roads

When Seiichi Himei, a 35-year-old engineer turned cattle farmer, took the Peugeot 307 HDi for a spin two years ago, he couldn't believe the force produced by the small, 1.4-liter car.

The magic ingredient was a diesel engine.

Touted for their torque and fuel economy, diesel-powered cars make up half the European market but long agolost street credit in Japan, where, after a series of tax changes and a damaging image campaign, just a single model remains on sale.

But diesel-savvy European car makers, cheered by a growing acceptance in the United States and the arrival of cleaner fuel, are gearing up to reverse that trend in a move that could force domestic brands to follow suit and stir up the world's third-biggest car market.

A comeback by diesels could also give European brands - long the underdogs with just 4 percent of Japan's car market - a welcome boost, help domestic oil refiners cut their losses by creating a better balance of gasoline and diesel supply, nudge Japan closer to a UN-mandated goal of cutting greenhouse gases, and provide a boon for diesel-parts makers like Bosch and Ibiden.

"You can buy practically anything in Japan, but not diesel cars," said Himei, a native of Okayama, who drove a gasoline-powered 307 before buying his used diesel version online.

"It's high time Japan woke up" to the merits of diesel, he said.

It was not always so.In 1990, diesel powered 6.4 percent of all new cars sold in Japan. But a law in 1992 lowering the limit on emissions of smog- forming nitrogen oxide - a major byproduct when burning diesel fuel - and tax changes that effectively narrowed the cost advantage of diesel fuel and made diesel cars more expensive, prompted a steady downturn in demand.

The death blow came in 1999 when,in a widely televised stunt, the governor of Tokyo, Shintaro Ishihara, waved a bottle containing black particles of carcinogenic soot that were emitted in greater quantity by diesels than gasoline vehicles.

By 2003 there were only 10 diesel models, whereas there had been 24 a year earlier.Now, only Toyota Motor's Landcruiser Prado remains, while buyers can choose from some 200 gasoline models.

That will change this autumn whenDaimlerChrysler's Mercedes brand will roll out a diesel E-Class and has promised more to come.

"We're optimistic about diesel's prospects here," said Hans Tempel, head of DaimlerChrysler Japan.

Other automakers such as Volkswagen - which now offers diesel on its entire U.S. product line - and Peugeotare also eager to test the waters, although they have yet to announce concrete plans.

"DaimlerChrysler's launch in Japan puts pressure on us to move," said a Volkswagen Japan spokeswoman,Dorothea Gasztner, adding that a decision on whether to offer a diesel car in Japan would be made soon.

The German auto industry association VDA says it will campaign aggressively in Japan for using diesels, promoting them as a clean and effective tool for reducing oil consumption and carbon dioxide emissions.

"Since diesels are on average 25 percent more efficient than gasoline engines, Japan could save 26 billion liters of fuel per year if only diesel engines were used instead of gasoline engines," the association's president, Bernd Gottschalk, said in Geneva this week.

Citing a growing focus on diesel cars globally and a likelihood that Japan would offer diesel-use incentives to meet its carbon dioxide reduction goals, the Tokyo-based Yano Research Institute predicted that diesels would have an 11 percent share of Japan's passenger car market in 2015, compared with 0.2 percent last year.